Phosphoinositide 3‐kinase (PI3K) is important in TCR signaling. PI3K generates phosphatidylinositol 3, 4, 5‐trisphosphate (PI‐3,4,5‐P₃), which regulates membrane localization and/or activity of multiple signaling proteins. PTEN (phosphatase and tensin homologue deleted on chromosome 10) opposes PI3K, reversing this reaction. Maintaining the balance between these two enzymes is important for normal T cell function. Here we use the PTEN‐null Jurkat T cell line to address the role of PTEN in modulating proximal and distal TCR‐signaling events. PTEN expression at levels that restored low basal Akt phosphorylation (an indicator of PI‐3,4,5‐P₃ levels), but which were not themselves cytotoxic, had minimal effect on TCR‐stimulated activation of phospholipase Cγ1 and Ca²⁺ flux, but reduced the duration of extracellular signal‐regulated kinase (Erk) activation. Distal signaling events, including nuclear factor of activated T cells (NFAT) activation, CD69 expression and IL‐2 production, were all inhibited by PTEN expression. Notably, PTEN did not block TCR‐stimulated PI‐3,4,5‐P₃ accumulation. The effect of PTEN on distal TCR signaling events was strongly correlated with the loss of the constitutive Akt activation and glycogen synthase kinase‐3 (GSK3) inhibition that is typical of Jurkat cells, and could be reversed by expression of activated Akt or pharmacologic inhibition of GSK3. These results suggest that PTEN acts in T cells primarily to control basal PI‐3,4,5‐P₃ levels, rather than opposing PI3K acutely during TCR stimulation.